Tribunal exempts service tax on laying underground cables for BSNL under roads

The Tribunal allowed the assessees' appeal, setting aside the demand for service tax on laying underground cables for BSNL. Relying on a CBEC Circular and the agreement specifying the cables were to be laid under roads, the Tribunal held the activity exempt from service tax. The decision clarified that laying cables under or alongside roads is not a taxable service, granting the assessees relief and dismissing the Revenue's appeal.

---

---

Issues: Appeal against the levy of service tax on the activity of laying underground cable.

Analysis:
1. Facts of the case: The assessees were engaged in laying underground cables for BSNL, which the Revenue considered falling under Erection, Commissioning, and Installation services. The demand for service tax was confirmed against the assessees, but the Commissioner (A) granted cum tax benefit to them. Both parties appealed the decision.

2. Arguments by Assessees: The assessees relied on CBEC Circular No. 123/5/2010-TRU, stating that laying cables under or alongside roads is exempt from service tax. They cited a previous Tribunal case that held no service tax liability for laying cables on behalf of BSNL.

3. Revenue's Argument: The Revenue contended that the records did not specify whether the cables were laid alongside or under the road. They requested a remand to determine this fact.

4. Tribunal's Decision: The Tribunal examined the CBEC Circular, which clarified that certain activities, including laying cables under roads, are not taxable services. The assessees provided the agreement showing the cables were to be laid under footpaths/roads/trenches. Therefore, the Tribunal held that the assessees were exempt from paying service tax on this activity. The impugned orders were set aside, and the appeals by the assessees were allowed with consequential relief, while the Revenue's appeal was dismissed.

This judgment clarifies the tax status of laying cables under or alongside roads, emphasizing that such activities are not taxable under the relevant provisions. The Tribunal's decision was based on the facts of the case and the CBEC Circular, providing a clear exemption from service tax for the assessees' activity of laying underground cables for BSNL.

---